By Joseph Mugenyi
In order to reap big from agriculture, farmers in Uganda have been advised to embrace large scale farming, because it is more profitable compared to small scale farming. Agriculture and Agribusiness experts contend that farmers need to do agriculture on large scale in order to benefit on a larger scale.
When it comes to production, farmers have really made it beyond expectations. At least most farmers have managed to care for their plants up to harvest period. The greatest problem faced by farmers now days is price fluctuation. Prices have been changing day and night. Imagine last week a crate of tomatoes was sold at 70,000-90,000shs but now it’s at 15,000-25,000. Banana prices previously ranged between 10,000-25,000shs but now its 2,000-10,000shs. This implies you need to sell more products to earn some profits. For example, if a small scale farmer produces 3 crates of tomatoes per week, say each at 20,000shs he/she will get a total of 60,000shs. General expenses incurred include
1-harvesting expense @ crate 2,000 ×3=6,000
2-transport to market place @ at 2,000×3=6,000shs
3-market fee @3,000 ×3=9,000.
4-empty crate 2,000shs ×3=6,000.
Total expense =27,000.
Balance 60,000-27,000shs = 33,000.
Mathematically 3 crates are sold at 33,000shs meaning each crate is sold at 11,000shs.
This is little money versus the input capital during the growing process. So a large scale farmer will produce atleast 100 crates. Using the above scenario, each crate will be sold at 11,00 ×100 =1,100,000shs per week. (Expenses already deducted). In comparison a small scale farmer will get 33,000shs per week whereas a large scale farmer will get 1,100,000shs. Mostly harvesting is done 4 times before completing the project.
Assuming the production number doesn’t change;
Small scale farmer gets
-> 33,000×4= 132,000shs
Large scale farmer gets
-> 1,100,000shs ×4= 4,400,000shs
This implies that when prices reduce a small scale farmer is more affected more than a large scale farmer is.
But when prices are high like 80,000shs @ crate; a small scale farmer gets at least 240,000shs per week and 960,000shs at the end of the project. Larger scale farmer gets 8,000,000shs per week and 32,000,000shs at the end of the project. At this point both rejoice after getting making profits. Take note of this in case you want to start investing in agriculture.
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Mugenyi Joseph (MJ Farmer) is a practicing Agribusiness entrepreneur based in Kibiito and a software Engineering student at Makerere University. He can be reached on 0701-443309, Email: email@example.com